| BUSINESS SEGMENT INFORMATION |
6. BUSINESS SEGMENT INFORMATION We adopted the provisions of ASU 2023-07 Segment Reporting for the year ended September 30, 2025. We are organized based on the products and services we offer, and we classify our business operations in three reportable segments for financial reporting purposes: Aerospace & Defense (A&D), Utility Solutions Group (USG) and RF Test & Measurement (Test). Corporate is not a reportable segment, but it is included for reconciliation purposes. The A&D segment’s operations consist of PTI, Crissair, Globe, Mayday, and Maritime. Previously, A&D also included VACCO Industries which was sold in July 2025 and is reported in discontinued operations. The companies within this segment primarily design and manufacture specialty filtration, fluid control and naval products, including hydraulic filter elements and fluid control devices used in aerospace and defense applications; custom designed filters for manned aircraft and submarines; products and systems to reduce vibration and/or acoustic signatures and otherwise reduce or obscure a vessel’s signature, power management and control equipment; sealing, surface control and hydrodynamic related applications to enhance U.S. and UK Navy maritime survivability; precision-tolerance machined components for the aerospace and defense industry; metal processing services; and miniature electro-explosive devices utilized in mission-critical defense and aerospace applications. The USG segment’s operations consist of Doble Engineering Company and related subsidiaries including Morgan Schaffer and Altanova/ISA (collectively, Doble), and NRG. Doble is an industry leader in the development, manufacture and delivery of diagnostic testing and data management solutions that enable electric power grid operators to assess the integrity of high-voltage power delivery equipment, and Altanova/ISA’s strong market presence in Europe and Asia provides Doble with a significant international platform. Doble combines three core elements for customers – diagnostic test and condition monitoring instruments, expert consulting, and testing services – and provides access to its large reserve of related empirical knowledge. NRG is a global market leader in the design and manufacture of decision support tools for the renewable energy industry, primarily wind and solar. The Test segment’s operations consist of ETS-Lindgren Inc., including its related subsidiaries, and MPE Limited (collectively, ETS-Lindgren). ETS-Lindgren is an industry leader in designing and manufacturing products and systems to measure and control RF energy. It serves the medical, health and safety, electronics, wireless communications, automotive and defense markets, supplying a broad range of turnkey systems, including RF test facilities and measurement systems, RF and magnetically shielded rooms and secure communication facilities, and providing the design, program management, installation and integration services required to successfully complete these types of facilities. It also supplies a broad range of components including RF absorptive materials, filters, antennas, field probes, test cells, proprietary measurement software and other test accessories required to perform a variety of tests and measurements, and offers a variety of services including calibration and product tests. Accounting policies of the segments are the same as those described in the summary of significant accounting policies in Note 1 to the Consolidated Financial Statements in the Company’s Form 10-K for the year ended September 30, 2025. The operating units within each reporting segment have been aggregated because of similar economic characteristics and meet the other aggregation criteria of FASB ASC 280, Segment Reporting. Measurement of Segment Results Our CODM, who is our Chief Executive Officer, evaluates each segment’s performance and allocates resources based on segment EBIT, which is defined as earnings before interest and taxes. EBIT is a non-GAAP financial measure and is reconciled to consolidated earnings before income taxes below for continuing operations. Intersegment sales and transfers are not significant. Segment assets consist primarily of customer receivables, inventories, capitalized software and fixed assets directly associated with the production processes of the segment. Segment depreciation and amortization is based upon the direct assets listed above. Corporate assets consist primarily of acquired intangible assets including goodwill, deferred taxes and cash balances. The tables below are presented on the basis of continuing operations and exclude discontinued operations. | | | | | | | | | | | | Three Months Ended June 30, 2026 | | | | | | | | Segment | | (In thousands) | | A&D | | USG | | Test | | Total | | Net Sales | | $ | 168,202 | | 99,963 | | 70,862 | | | 339,027 | | | | | | | | | | | | | | Cost of sales | | | 100,724 | | 48,267 | | 48,518 | | | | | SG&A expense | | | 16,694 | | 27,668 | | 10,116 | | | | | Amortization of intangible assets | | | 148 | | 1,983 | | 503 | | | | | Other expenses, net | | | 218 | | 62 | | 843 | | | | | Segment profit | | $ | 50,418 | | 21,983 | | 10,882 | | | 83,283 | | | | | | | | | | | | | | Depreciation and Amortization | | $ | 3,456 | | 4,082 | | 1,433 | | | 8,971 | | Segment Assets | | $ | 445,178 | | 285,583 | | 200,907 | | | 931,668 | | Capital Expenditures | | $ | 8,943 | | 1,767 | | 662 | | | 11,372 | | | | | | | | | | | | | | Reconciliation of segment profit to Earnings before Income Taxes | | | | | | | | | | | | | | | | | | | | | | | | Segment profit total from above | | | | | | | | | $ | 83,283 | | Less: | | | | | | | | | | | | Unallocated Corporate SG&A and Other expenses, net | | | | | | | | | | (15,907) | | Unallocated amortization of intangible assets | | | | | | | | | | (17,709) | | Interest expense, net | | | | | | | | | | (8,713) | | Earnings before Income Taxes | | | | | | | | | $ | 40,954 | | | | | | | | | | | | | | Reconciliation of segment depreciation and amortization to consolidated totals | | | | | | | | | | | | | | | | | | | | | | | | Segment Depreciation and Amortization | | | | | | | | | $ | 8,971 | | Add: Corporate Depreciation and Amortization | | | | | | | | | | 17,772 | | Consolidated totals | | | | | | | | | $ | 26,743 | | | | | | | | | | | | | | Reconciliation of segment assets to consolidated totals | | | | | | | | | | | | | | | | | | | | | | | | Segment Assets total | | | | | | | | | $ | 931,668 | | Add: | | | | | | | | | | | | Goodwill not allocated to segments | | | | | | | | | | 760,275 | | Acquired intangible assets not allocated to segments | | | | | | | | | | 621,272 | (1) | Other unallocated amounts | | | | | | | | | | 106,788 | | Consolidated totals | | | | | | | | | $ | 2,420,003 | |
| (1) | Consists of customer relationships, trade names and other intangible assets. See Note 5 for details. |
| | | | Reconciliation of segment capital expenditures to consolidated totals | | | | | | | | Segment Capital Expenditures | | $ | 11,372 | Add: Corporate Capital Expenditures | | | 55 | Consolidated totals | | $ | 11,427 |
| | | | | | | | | | | | Nine Months Ended June 30, 2026 | | | | | | | | Segment | | (In thousands) | | A&D | | USG | | Test | | Total | | Net Sales | | $ | 462,341 | | 280,976 | | 194,710 | | | 938,027 | | Cost of sales | | | 280,995 | | 131,540 | | 132,739 | | | | | SG&A expense | | | 49,203 | | 78,582 | | 30,003 | | | | | Amortization of intangible assets | | | 464 | | 6,061 | | 1,525 | | | | | Other expenses, net | | | 307 | | 795 | | 2,746 | | | | | Segment profit | | $ | 131,372 | | 63,998 | | 27,697 | | | 223,067 | | | | | | | | | | | | | | Depreciation and Amortization | | $ | 10,203 | | 12,288 | | 4,354 | | | 26,845 | | Segment Assets | | $ | 445,178 | | 285,583 | | 200,907 | | | 931,668 | | Capital Expenditures | | $ | 18,397 | | 4,399 | | 1,653 | | | 24,449 | | | | | | | | | | | | | | Reconciliation of segment profit to Earnings before Income Taxes | | | | | | | | | | | | | | | | | | | | | | | | Segment profit total from above | | | | | | | | | $ | 223,067 | | Less: | | | | | | | | | | | | Unallocated Corporate SG&A and Other expenses, net | | | | | | | | | | (35,742) | | Unallocated amortization of intangible assets | | | | | | | | | | (53,037) | | Interest expense, net | | | | | | | | | | (13,992) | | Earnings before Income Taxes | | | | | | | | | $ | 120,296 | | | | | | | | | | | | | | Reconciliation of segment depreciation and amortization to consolidated totals | | | | | | | | | | | | | | | | | | | | | | | | Segment Depreciation and Amortization | | | | | | | | | $ | 26,845 | | Add: Corporate Depreciation and Amortization | | | | | | | | | | 53,228 | | Consolidated totals | | | | | | | | | $ | 80,073 | | | | | | | | | | | | | | Reconciliation of segment assets to consolidated totals | | | | | | | | | | | | | | | | | | | | | | | | Segment Assets total | | | | | | | | | $ | 931,668 | | Add: | | | | | | | | | | | | Goodwill not allocated to segments | | | | | | | | | | 760,275 | | Acquired intangible assets not allocated to segments | | | | | | | | | | 621,272 | (1) | Other unallocated amounts | | | | | | | | | | 106,788 | | Consolidated totals | | | | | | | | | $ | 2,420,003 | |
| (1) | Consists of customer relationships, trade names and other intangible assets. See Note 5 for details. |
| | | | Reconciliation of segment capital expenditures to consolidated totals | | | | | | | | Segment Capital Expenditures | | $ | 24,449 | Add: Corporate Capital Expenditures | | | 111 | Consolidated totals | | $ | 24,560 |
| | | | | | | | | | | Three Months Ended June 30, 2025 | | | | | | | | | Segment | (In thousands) | | A&D | | USG | | Test | | Total | Net Sales | | $ | 136,324 | | 92,357 | | 67,663 | | | 296,344 | | | | | | | | | | | | Cost of sales | | | 84,644 | | 43,721 | | 46,110 | | | | SG&A expense | | | 14,082 | | 24,058 | | 9,738 | | | | Amortization of intangible assets | | | 201 | | 2,327 | | 532 | | | | Other expenses, net | | | 820 | | 711 | | 551 | | | | Segment profit | | $ | 36,577 | | 21,540 | | 10,732 | | | 68,849 | | | | | | | | | | | | Depreciation and Amortization | | $ | 3,059 | | 4,246 | | 1,496 | | | 8,801 | Segment Assets | | $ | 369,770 | | 285,887 | | 190,341 | | | 845,998 | Capital Expenditures | | $ | 4,629 | | 2,054 | | 934 | | | 7,617 | | | | | | | | | | | | Reconciliation of segment profit to Earnings before Income Taxes | | | | | | | | | | | | | | | | | | | | | | Segment profit total from above | | | | | | | | | $ | 68,849 | Less: | | | | | | | | | | | Unallocated Corporate SG&A and Other expenses, net | | | | | | | | | | (14,166) | Unallocated amortization of intangible assets | | | | | | | | | | (13,693) | Interest expense, net | | | | | | | | | | (7,921) | Earnings before Income Taxes | | | | | | | | | $ | 33,069 | | | | | | | | | | | | Reconciliation of segment depreciation and amortization to consolidated totals | | | | | | | | | | | | | | | | | | | | | | Segment Depreciation and Amortization | | | | | | | | | $ | 8,801 | Add: Corporate Depreciation and Amortization | | | | | | | | | | 13,559 | Consolidated totals | | | | | | | | | $ | 22,360 | | | | | | | | | | | | Reconciliation of segment assets to consolidated totals | | | | | | | | | | | | | | | | | | | | | | Segment Assets total | | | | | | | | | $ | 845,998 | Add: | | | | | | | | | | | Goodwill not allocated to segments | | | | | | | | | | 760,555 | Acquired intangible assets not allocated to segments | | | | | | | | | | 701,650 | Other unallocated amounts | | | | | | | | | | 106,842 | Consolidated totals | | | | | | | | | $ | 2,415,045 |
| (1) | Consists of customer relationships, trade names and other intangible assets. |
| | | | Reconciliation of segment capital expenditures to consolidated totals | | | | | | | | Segment Capital Expenditures | | $ | 7,617 | Add: Corporate Capital Expenditures | | | 1,728 | Consolidated totals | | $ | 9,345 |
| | | | | | | | | | | Nine Months Ended June 30, 2025 | | | | | | | | | Segment | (In thousands) | | A&D | | USG | | Test | | Total | Net Sales | | $ | 307,819 | | 269,784 | | 165,111 | | | 742,714 | | | | | | | | | | | | Cost of sales | | | 192,760 | | 126,481 | | 112,082 | | | | SG&A expense | | | 35,544 | | 74,317 | | 28,487 | | | | Amortization of intangible assets | | | 742 | | 6,417 | | 1,608 | | | | Other expenses (income), net | | | 527 | | (239) | | 1,411 | | | | Segment profit | | $ | 78,246 | | 62,808 | | 21,523 | | | 162,577 | | | | | | | | | | | | Depreciation and Amortization | | $ | 8,545 | | 11,998 | | 4,225 | | | 24,768 | Segment Assets | | $ | 369,770 | | 285,887 | | 190,341 | | | 845,998 | Capital Expenditures | | $ | 10,552 | | 7,639 | | 3,439 | | | 21,630 | | | | | | | | | | | | Reconciliation of segment profit to Earnings before Income Taxes | | | | | | | | | | | | | | | | | | | | | | Segment profit total from above | | | | | | | | | $ | 162,577 | Less: | | | | | | | | | | | Unallocated Corporate SG&A and Other expenses, net | | | | | | | | | | (32,950) | Unallocated amortization of intangible assets | | | | | | | | | | (23,968) | Interest expense, net | | | | | | | | | | (12,373) | Earnings before Income Taxes | | | | | | | | | $ | 93,286 | | | | | | | | | | | | Reconciliation of segment depreciation and amortization to consolidated totals | | | | | | | | | | | | | | | | | | | | | | Segment Depreciation and Amortization | | | | | | | | | $ | 24,768 | Add: Corporate Depreciation and Amortization | | | | | | | | | | 23,633 | Consolidated totals | | | | | | | | | $ | 48,401 | | | | | | | | | | | | Reconciliation of segment assets to consolidated totals | | | | | | | | | | | | | | | | | | | | | | Segment Assets total | | | | | | | | | $ | 845,998 | Add: | | | | | | | | | | | Goodwill not allocated to segments | | | | | | | | | | 760,555 | Acquired intangible assets not allocated to segments | | | | | | | | | | 701,650 | Other unallocated amounts | | | | | | | | | | 106,842 | Consolidated totals | | | | | | | | | $ | 2,415,045 |
| (1) | Consists of customer relationships, trade names and other intangible assets. |
| | | | Reconciliation of segment capital expenditures to consolidated totals | | | | | | | | Segment Capital Expenditures | | $ | 21,630 | Add: Corporate Capital Expenditures | | | 2,580 | Consolidated totals | | $ | 24,210 |
Non-GAAP Financial Measures The financial measure “EBIT” is presented in the above tables and elsewhere in this Report. EBIT on a consolidated basis is a non-GAAP financial measure. Management believes that EBIT is useful in assessing the operational profitability of the Company’s business segments because it excludes interest and taxes, which are generally accounted for across the entire Company on a consolidated basis. EBIT is also one of the measures used by management in determining resource allocations within the Company as well as incentive compensation. A reconciliation of EBIT to net earnings is set forth in Item 2, Management’s Discussion and Analysis of Financial Condition and Results of Operations – EBIT. The Company believes that the presentation of EBIT provides important supplemental information to investors to facilitate comparisons with other companies, many of which use similar non-GAAP financial measures to supplement their GAAP results. However, the Company’s non-GAAP financial measures may not be comparable to other companies’ non-GAAP financial performance measures. Furthermore, the use of non-GAAP financial measures is not intended to replace any measures of performance determined in accordance with GAAP.
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